News: Company reported healthy performance in Q1FY23. Net sales for the quarter came in at Rs 500 crore, down 10% QoQ. EBITDA in Q1FY23 came in at Rs 52 crore with corresponding EBITDA margins at 10.3%, down 90 bps QoQ. Ensuing PAT for the quarter came in at Rs 30 crore, down 22% QoQ.
View: Company’s quarterly performance out-performed volume growth at its key client. Savings were realised on the raw material front (down 50 bps QoQ) however negative operating leverage (other expenses up 150 bps QoQ) took a toll on overall margins. The numbers however broadly tracked our annual estimates for FY23E. We remain positive on the stock with company being a key beneficiary of CV cyclical upswing.
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